UKBAA Update on Covid-19 Information for Small Businesses

As we start another week in addressing the impact of Covid-19, we are sending out this update from UKBAA to ensure that you are aware of the latest measures being put in place by the Government to support small businesses, and to enable Investors to advise their investee businesses and those they are supporting.

The British Business Bank today has launched the details of the new Coronavirus Business Interruption Loan Scheme (CBILS) which is now open for applications for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow. Full details of the CBILS scheme can be found here but the main criteria are

  • Loan facilities of up to £5m
  • 80% of the lenders risk is covered
  • Repayment terms up to 6 years for term loans and asset finance, but overdraft and invoice facilities will be up to 3 years.
  • No upfront fees and interest is covered by Government for up to 12 months
  • Companies remain 100% liable for the debt repayments. Total unsecured lending of up to £250,000.
  • Application for loans from the scheme is administered by over 40 approved lenders including main banks, challenger banks and asset finance etc. Businesses need to apply directly to the lenders and present their case for the finance needed.

We recognise that the CBILS Loan scheme is not suitable for pre-revenue, very early stage, low revenue start-up/seed businesses that many Investors will be supporting. UKBAA is therefore working together with BVCA and many other leading players to gain the Government’s support for alternative finance/tax mechanisms, including ones that help to stimulate/leverage the investment market at this time. We will of course update you on other measures being made available.

Meanwhile measures now agreed or being put in place for small businesses include the following:

  • Coronavirus Job Retention Scheme: 80% of employees’ wages can be covered up to £2,500 per month that can no longer be paid ( ie “furloughed. The scheme will be administered by HMRC through a special portal being established with details available shortly.
  • VAT will deferred for 3 months from 20th March to 20th June 2020
  • Income tax prepayments under the Self Assessment scheme due in July 2020 can be deferred until January 2021 includes self-employed.
  • Statutory Sick Pay costs to employees will be covered for two weeks – a rebate scheme is being developed- not yet available
  • Business Rates Holiday for 2020-21 tax year for businesses in the Retail, Hospitality and Leisure sectors – no action needed will be applied to next Council tax bill
  • Cash grants for Businesses in the Retail, Hospitality and Leisure sectors – up to £25k per business property for those with rateable value of £15k-£51k and £10k for those in these sectors with lower rateable value – no action needed will be directly contacted by local authority
  • Small Business Grant Scheme – £10k for businesses (any sector) already receiving Small Business Rate relief – based on property occupation – available through local authority

Further details on these schemes can be seen at the government special website: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19

We recognise that these are challenging times for all of our community and the small businesses that Investors are supporting and that the pace of implementation is of the essence. We are keen to know how else we can support Investors at this time, so please don’t hesitate to get in touch and give us your comments, views or ideas. We also plan to provide regular briefings on relevant developments.

Update provided by Jenny Tooth OBE | Chief Executive | UKBAA
23rd March 2020

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